In September 2017, Stephan Bogner from Rockstone Research took a flight to Montreal and then to Rouyn-Noranda in Ontario to visit the properties of Castle Silver Resources Inc. (“CSR”).
CEO Frank Basa hosted the site visit and gave some valuable insights. Today’s report covers the Castle Mine property and a future report will present the Beaver Mine property also with a drone video coverage.
In the first video, you can see us underground at the Castle Mine:
In the second video, you can see the Castle Mine property with a bird´s eye view:
In the video, you hear excerpts of Frank Basa being interviewed by SmallCapPower.com in late September 2017 (see also here). In May 2017, Basa was also interviewed by David Morgan from TheMorganReport.com.
“The best place to ever find a deposit is said to be in the shadow of an old head frame. With the Castle Silver Mine that seems to be true. While past mining focused on the production of silver, many of the adits contain visible cobalt veins and at least a bulk sample for testing purposes would be easy to mine and permit.” (Bob Moriarty in “Castle Silver should be called Castle Cobalt”, May 23, 2017)
Full version / Cobalt mineralization can be detected with the naked eye (plus some light) in the form of pinkish erythrite (or "cobalt bloom" as the miners call this oxide mineral), which is a weathering product of cobalt-containing minerals such as cobaltite.
• While walking inside the Castle Underground Mine, Frank Basa explained that previous miners focused only on silver and left the cobalt in place, because back then it was considered a byproduct of little value which complicated the smelting and recovery process for silver.
• In the 1980s, when silver prices were in a strong bull market, Agnico Eagle leased the Castle Mine and also focused on mining only the silver. In 1989, when silver prices collapsed to about $6.50 USD/ounce, Agnico Eagle ceased operations at Castle and other mines in the camp, and shifted its focus to gold. This is fortunate for CSR because cobalt and silver prices have appreciated strongly over the last decades, and there is still cobalt and silver in place at the Castle Mine.
• Although cobalt and silver are typically found together in quartz and calcite veins at the Castle Mine, low-grade silver veins were largely ignored even if they had high-grade cobalt. Also, cobalt at Castle typically not only occurs within the silver mineralization but also in its proximity (in the video, Basa noted that cobalt and silver occurrences are similar to the behaviour of oil and water, with the oil/cobalt floating above the silver/water). So previous operators only mined the obvious silver mineralization and left cobalt mineralization in place (as good as they could).
• The name “cobalt” originates from Saxony miners who were not capable of recovering silver from cobalt ores. During their smelting attempts, they noticed bad smelling (garlic-like) and poisonous fumes (due to the German ore being also rich in arsenic). On these grounds, such ore was considered bedevilled and, as they imagined, it must have been goblins (German: “Kobold”) eating all the silver and excreting cobalt (geologists later confirmed it to NOT being a sedimentary replacement deposit type).
• It was not until 1735 before such ores were found to be reducible to a new metal and it was ultimately named “kobold”. Cobalt became the first metal to be discovered since the pre-historical period, during which all the known metals (iron, copper, silver, gold, zinc, mercury, tin, lead and bismuth) had no recorded discoverers. Swedish chemist Georg Brandt (1694-1768) is credited with discovering cobalt in 1735, showing it to be a previously unknown element, different from bismuth and other traditional metals.
• Today, several methods exist for the separation of cobalt from all kinds of ores, which are almost always enriched with other metals (silver, copper, nickel, iron and/or uranium).
• In the early 1980s, Basa worked for Agnico Eagle at the Castle Mine, as a metallurgical engineer, processing ore from Castle and other mines in Ontario’s Cobalt-Silver Camp. During that time, Basa developed the RE-2OX Process with the National Research Council and they engineered a process that could separate both the cobalt and the silver from a mixed concentrate. However, that processing success occurred in the late 1980s, so Agnico Eagle never applied the RE-2OX Process commercially.
• Some time after Agnico Eagle ceased operations at Castle, Basa picked up some of the assets that he knew to be high-grade and he judged them to be the best for redevelopment. Since then, Basa and his team have refined the RE-2OX Process further. They are now also testing this process at SGS Lakefield to see if it works for extracting cobalt, lithium and other metals from used lithium-ion battteries. “If we can show that it works, we could be in a position to open up a new line of business extracting cobalt and other metals by recycling spent lithium-ion batteries,” Basa explained in an interview with the Northern Miner. “We’ve asked around and we haven’t found anyone else in Canada doing that right now.”
• Before the 20th century, a significant part of world’s cobalt production came from Europe but with the discovery of cobalt-rich deposits in Canada’s Ontario in 1904, and in the Congo in 1914, the mining operations shifted to these regions. In Ontario, mining took place predominately during high prices for silver, i.e. in early 1900s and 1980s, as there´s a lot of silver in such magmatic hydrothermal cobalt-nickel-silver-(gold) vein deposits. Typical economic grade from such magmatic sulphide deposits is 0.1% cobalt (British Geological Society, 2009). In the Congo, the cobalt occurs together with a lot of copper and/or nickel in sedimentary exhalite Red Bed type deposits, containing about 0.5% cobalt (Walter L. Pohl in "Economic Geology: Principles and Practice, 2011). Inside the Castle Underground Mine, CSR took 5 chip samples averaging 1.06% cobalt, 5.3% nickel and 17.5 g/t silver.
• Until today, the Congo continues to be the world’s dominant producer of cobalt, but since the metal has become critical for the production of long-lasting batteries, more supply (especially from safe and stable jurisdictions) is needed. Ontario’s Cobalt-Silver Camp is predestined to help fill cobalt’s projected supply deficit in the upcoming years. CSR owns one of the best assets in Ontario for redevelopment.
Above map shows areas where the Nipissing Diabase (purple) is known to occur at or near the surface. Silver and cobalt are typically found close to the Nipissing Diabase. CSR owns 100% of the Castle Silver Property, including the past producing Castle Mine and the near-by Golden Corridor Zone. CSR also owns 100% of the Beaver Silver Cobalt Property, including the past producing Beaver Mine. CSR also owns 100% of the Violet Silver Cobalt Property, including the past producing Violet Mine.
Above map represents on-going efforts to digitize the extensive data available on past underground mine workings and drill holes at the Castle No.3 Mine. The map shows the underground workings (pink lines) at Level 1 at a depth of 79 feet (24.1 m) and the exploration holes (yellow lines) that were drilled from Level 1. Mining occurred on 11 different levels during the 1900s down to approximately 850 feet (259.1m). The map also shows seven of the 12 surface holes (blue lines) drilled by the Company in 2011 (with five others drilled in 2011 located to the east of the area shown). The terrain details are from a drone survey completed in the spring of 2016 that provided current and accurate surface elevation data. Coloured dots on the map show silver grades (cobalt grades were not recorded). (Source: CSR Corporate Presentation, September 2017)
• CSR owns 100% of the 3,200 hectares Castle Mine Property, 85 km northwest of the historic Cobalt Silver Mining Camp, including the past producing Beaver and Violet Mines near the city of Cobalt.
• All of the 3 properties are located near several historic mines in the Greater Cobalt Camp which produced over 500 million oz silver and tens of millions lbs cobalt in the 1900s.
• The Castle Mine, with its high silver grades, was one of the last in operation (historical production: 9.5 million oz silver and 300,000 lbs cobalt).
• Agnico Eagle, which operated the Castle Mine between 1979-1989, closed the mine because of low silver prices ($6.50 USD/oz).
• 2011 drilling showed exceptionally high silver/cobalt intercepts, such as 6,476 g/t silver over 3.09 m (CA11-08) and 1.44% cobalt over 0.12 m (CA11-09).
• A short distance inside the adit, chip sampling results show strong mineralization along a 4 m length of a vein as wide as 30 cm. The vein is observed to continue for some 90 m. The first 5 chip samples averaged 1.06% cobalt, 5.3% nickel and 17.5 g/t silver.
• Preliminary metallurgical tests in 2017 showed excellent recoveries for silver (98.5%) and cobalt (70.5%) as well as high concentrate grades (11,876 g/t silver and 10.5% cobalt). Additional testing underway to test for optimization of grind and reagents.
• Geophysical IP survey completed in 2017 to target future drilling locations.
• First Nations agreements in place.
All New Approach to Mining
Management’s philosophy is to acquire previously producing mine sites in politically safe pro mining jurisdictions then systematically and efficiently explore with the goal of defining a viable resource as a first step on the road to production. CSR has a minimum of 3 prospective mineralization targets including cobalt, silver and gold.
CSR owns a 3,300 hectares property formerly known as the Castle Silver Mine. The property was a past producing silver mine near the northern Ontario community of Gowganda, Ontario which is situated 85km northwest of the historic Cobalt Silver Mining Camp. This former Castle Silver Mine property is acknowledged to be situated within the traditional territories of 2 primary First Nations. When CSR acquired the property on September 15, 2015, it inherited 2 memorandums of understandings with First Nations entered into by the predecessor to Granada Gold Mine, Gold Bullion Development Corp. The MOUs inherited are 2 agreements: An agreement with Matachewan First Nation and an agreement with Temagami First Nation and the Teme-Augama Anishnabai. The agreements were entered into in order to ensure responsible and progressive development of exploration projects since they are located within the traditional territories of 2 First Nations. CSR will continue with these agreements to honour and maintain the pre-existing relationships thus ensuring any development carried out at the Castle Silver property will be consistent with the previously signed agreements.
Management & Directors
Frank J. Basa (President, CEO, Director)
Mr. Basa has over 28 years’ global experience in gold mining and development as a professional hydro-metallurgical engineer with expertise in milling, gravity concentration, flotation, leaching and refining of precious and base metals. He is a member of the Professional Engineers of Ontario and a graduate of McGill University. Mr. Frank J. Basa, P.Eng., has been the Chief Executive Officer and President of Castle Silver Resources Inc. since September 15, 2015 and the CEO and President of Granada Gold Mine since June 18, 2004.
Dianne Tookenay (Director)
Ms. Tookenay holds a Certificate in Mining Law from the Osgoode Hall Law School, York University, a Joint Masters of Public Administration from the University of Manitoba, a Bachelor of Administration from Lakehead University and Native Band Management and Indian Economic Development Diplomas from Confederation College Applied Arts and Technology. Ms. Tookenay’s experience, knowledge and deep roots within the First Nation communities will add significant value to Castle’s development efforts over the coming years.
Jacques F. Monette (Director)
Mr. Monette is a career miner who has been engaged in every facet of underground mining for more than 40 years. His previous positions included Shaft Project Coordinator with Cementation Canada Inc., Vice President of Operations/Mining Division for Wabi Development Corp., Vice President of Development for CMAC Mining Group, Operations Manager for Moran Mining and Tunneling, as well as Area Manager for J.S. Redpath Group. He has been an Independent Director of Castle Silver Resources Inc. since September 15, 2015. He has been a Director of Granada Gold Mine since July 7, 2008.
Thomas P. Devlin (CFO)
Mr. Devlin brings to the company over 40 years of accounting and management experience in the investment and junior resource industries. Mr. Devlin, also known as Tom, has been the Chief Financial Officer of Castle Silver Resources Inc. since September 23, 2015. He has been Chief Financial Officer of Granada Gold Mine since July 3 2009.
Robert Setter (Director)
Mr. Setter is the former Senior Financial Editor for Report on Mining and a former public company Director. He brings an extensive business, marketing and analysis background to the company, is a graduate of UBC and holds a BA in Economics. Mr. Setter serves as Corporate Research and Analytics for Granada Gold Mine since 2012. He has been a Director of Castle Silver Resources since January 2016.
Annemette Jorgensen (Director)
Annemette Jorgensen brings over two decades of public company corporate development, finance, media, and public relations and investor relations expertise. Ms. Jorgensen has served on the board of Granada Gold Mine since April, 2012. As Manager of Debentures Investments with Samoth Capital Corporation, Ms. Jorgensen was responsible for raising over a million dollars per month.
Tina Whyte (Corporate Secetary)
Tina Whyte brings over 20 years of experience in the corporate and securities industry. Her expertise spans to areas of corporate governance, continuous disclosure, financing transactions and regulatory filings and compliance. Ms. Whyte holds corporate secretary positions with other publicly listed companies.
Interview with Frank Basa (by Isabel Belger)
Castle Silver Resources Inc.
3028 Quadra Court
Coquitlam, BC, V3B 5X6 Canada
Phone: +1 819 797 4144
Shares Issued & Outstanding: 55,942,529
Canadian Symbol (TSX.V): CSR
Current Price: $0.185 CAD (10/10/2017)
Market Capitalization: $10 Million CAD
German Symbol / WKN (Frankfurt): 4T9B / A2DG7E
Current Price: €0.13 EUR (10/10/2017)
Market Capitalization: €7 Million EUR
Report #1 “Two of the best places to find cobalt“ (June 13, 2017)
Disclaimer: Please read the full disclaimer within the full research report as a PDF (here) as fundamental risks and conflicts of interest exist.